Nokia: Desperate measures for desperate times?

Today Nokia made several announcements, including one outlining redundancies and downgrading profit outlook and one regarding the sale of the luxury handset Vertu division. What is the significance as Nokia struggles to reverse its recent downwards spiral?

The sale of Vertu means Nokia is exiting the luxury handset market. No more of making profitable bling powered by a fairly run-of-the-mill-OS (the OS Nokia CEO Stephen Elop considers outdated). I guess Nokia doesn't like growth of sales, it doesn't fit with the current strategy! Vertu could have been a safe haven ensuring Nokia continues to make mobile phones, as its other mobile divisions are in a sorry state.

The operational changes and redundancies mean doom and gloom. The reports are that it means the total cancellation of the Meltemi platform - a linux based platform being developed for future low-cost phones (i.e. to replace the Symbian OS and be a Nokia competitor to Samsung's Bada). As Symbian was already on limited time life-support, these changes today appear to mean that Nokia is accelerating towards a Windows Phone only future. However Windows Phone will not run on low-powered hardware, and therefore this means Nokia is also exiting the low-end phone market as it will be difficult to compete with Samsung, ZTE and all with more modern software.

So, Nokia ploughs ahead with Plan A (Windows Phone Lumia handsets), a plan which hasn't been working out very successfully so far, and dumps Plan B (Meltemi) whilst ensuring any new low-cost handsets won't be (perceived as) competitive or attractive either. I know these are not good times for Nokia, and things are getting desperate for them, but this seems a desperately risky plan. Its sad to see a once-proud Company in such dire straits.

You can now buy a Nokia share for about the same as a ringtone or app...which will be the wiser investment?

Martin Yagi.

Martin is available for freelance consulting on mobile standards/collaboration, emerging applications/technology and innovation. To discuss your requirements check contact details in Martin's profile.